NRI Banking FAQ

Banking Queries for Non-resident Indians, Answered

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  • Who is an NRI?
    • An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident.
    • Persons posted in U.N. organisations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents.
    • Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs) for the purpose of certain facilities.
    • Resident Indian students proceeding abroad for pursuing studies are also treated as Non-Residents.
    • Non-Resident Indians become Indian residents only when they come back to India for employment or for carrying-on any business in India or vocation or for any other purpose indicating an indefinite period of stay in India.They are not regarded as Resident Indians during their short visits to India on leave, holiday, etc.
  • Who is a Person of Indian Origin ?
    For the purposes of availing of the facilities of opening and maintaining bank accounts and investments in shares / securities in India, a citizen (other than a citizen of Pakistan or Bangladesh) is a PIO if:
    • He / She has at any time held an Indian passport
    • He / She or either his / her parents or any of his / her grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955)
    • The person is a spouse of an Indian citizen or a person referred to in sub clause (1) or (2)
  • What facilities are available to NRI customers?
    NRI can :
    • maintain bank accounts in India
    • invest in shares / securities / deposits of Indian companies and
    • invest in immovable property
    • invest in mutual funds

  • What are the different types of accounts which NRIs can maintain?
    NRIs can open account in Indian Rupees and Foreign Currency. The types of accounts are as follows:
      Indian Rupee: NRO Account
    • Savings Account
    • Current Account
    • Recurring Deposit Account
    • Term Deposit Account
      Indian Rupee: NRE Account
    • Savings Account
    • Current Account
    • Recurring Deposit Account
    • Term Deposit Account
      Foreign Currency: FCNR Deposits
    • Term Deposit Account

  • How to open an NRE/FCNR accounts with a branch in India ?
    Fill up the account opening form ( click here to download), and send it to your branch of choice along with self attested two passport sized photographs.

    Passport and Residence Visa/ID card copies duly attested by Banker /Notary Public /Indian embassy.

    Initial remittance from abroad 

    Signature on account opening form verified by any one of the following:
    • Indian embassy/consulate/high commissioner
    • Your bank abroad
    • Notary public
    • Proof of Income/ Employee ID/ Labour ID

      Enclosures(any two of the following):
      • Cheque drawn on bank account abroad
      • Latest overseas bank statement in original
      • Cancelled paid cheque of your overseas bank account
      • Proof of income/ Employee ID/labour ID 
  • Can NRIs maintain multiple accounts with different banks in India simultaneously?
    Yes, NRIs can maintain any number of accounts with any number of banks in India.

  • Can these accounts opened with any bank in India?
    No. Only those banks holding an Authorised Dealers license or banks specially authorized in this regard by the Reserve Bank of India are permitted to open these accounts on behalf of NRIs.

  • Is nomination facility available in NRI accounts?
    Yes. Please fill in the nomination details in the account opening form.

  • Can NRIs open account jointly with residents?
    Yes. NRIs can open Non-Resident accounts jointly with residents provided first name account holder is an NRI on former or survivor basis.
  • Can a Power of Attorney (POA) open an NRI account on behalf of a non- resident?

  • Can a resident POA operate on an NRI accounts?
    POA holder can only operate on an NRI account to the extent of withdrawal for permissible local payments or remittance to the account holder through normal banking channels.

  • What are the restrictions imposed on a POA holder?
    A POA holder cannot do any of the following acts:
    • Open and close NRI accounts in the name of the NRI
    • Repatriate funds from account in the form of DD / TT etc.
    • Give gifts
    • Transfer funds to other NRE accounts
    • Cannot raise loans / execute documents on behalf of NRIs / OCBs
    • Cannot tender foreign currency notes or travelers cheques

  • What is the difference between NRE and NRO accounts?
    The basic difference between an NRE and NRO account is that funds in an NRE account can be repatriated abroad freely. In an NRO account, funds are not repatriable abroad except under the following circumstances:
    • Current Income
    • Upto USD 1 million per financial year (April to March) for any bonafide purposes out of the balances in the account / sale proceeds of assets in India acquired by way of inheritance / legacy inclusive of assets acquired out of settlement subject to certain conditions as per prevailing FEMA norms

  • Can funds be transferred from an exsiting NRE / FCNR account to open an NRO account?

  • Can an FCNR deposit in one currency be converted into another currency?
    Yes. However it would be advisable to do so only on maturity of the deposit so that there is no loss of interest.

  • Can a fixed deposit be broken before maturity?
    Yes. Interest would be payable at the applicable interest rate prevailing for that period at the time of opening the deposit. The minimum period for NRE / FCNR deposits would be 1 year. A penalty charge as applicable would be levied.

  • Are debits and credits to NRO accounts freely allowed by banks maintaining the accounts?
    Yes. Debits for local payments are allowed freely. Funds representing legitimate dues of the account holder or proceeds of remittances received from abroad through banking channels are permitted to be credited freely. Debits to the accounts for the purpose of investment in India and credits representing sale proceeds of investments are allowed subject to the account holder giving an undertaking at the time of opening the account to the effect that such investments/disinvestments would be covered either by the general or special permission of Reserve Bank.

  • What are the admissible debits and credits in NRE accounts?
    Only funds remitted from abroad and which are repatriable are allowed to be credited into NRE accounts. However, debits on account of local payments / investments are freely allowed.

  • Can Travellers Cheques or Currency be used to open an account or credit an existing NRE account?
    Travellers Cheques can be used to credit / open the account when on personal visit. NRIs bringing Foreign Currency Notes / Travellers Cheques will have to submit a Currency Declaration Form (CDF) to the Customs Authorities on arrival in India if the foreign currency notes exceed USD 5,000 or Travellers Cheques and notes exceed USD 10,000. The CDF must be produced for endorsement by the Bank when the money is submitted for opening / crediting the account.

  • Can the funds in the NRI account be repatriated?
    Both principal and interest in the NRE and FCNR accounts can be repatriated. As far as NRO accounts are concerned, upto USD 1 million out of legitimate balances held in NRO accounts, sale proceeds of assets can be repatriated on payment of tax and production of an undertaking and a CA certificate by the person making the remittance. Interest in the NRO account can be repatriated after payment of requisite taxes.

  • What is a Resident Foreign Currency account?
    This is a scheme permitting persons of India nationality or origin who have returned to India for permanent settlement (Returning Indians) after being resident outside India for a continuous period of not less than one year, to open foreign currency accounts against the proceeds held in NRE / FCNR accounts.

  • Which funds can be credited to RFC accounts?
    Funds from the following sources can be credited to RFC accounts:
    • Sale / maturity proceeds of assets held abroad and income therefrom
    • Pension received abroad
    • Currency notes / TCs brought into India at the time of returning
    • Balances in NRE / FCNR accounts

  • Can foreign currency notes be credited to an RFC account?
    Yes. However, if the value exceeds or is equal to USD 5,000 they have to be declared in the currency declaration form.

  • Can RFC accounts be opened jointly?
    RFC accounts can be
    • jointly with other Non- resident Indian (s)
    • or jointly with resident close relative in India provided first name account holder is an NRI on former or survivor basis.

  • Are NRO / NRE account holders eligible for loans / overdrafts against their fixed deposits?
    Yes, except for the purpose of relending, carrying on agricultural/plantation activities or for investment in real estate business. Loans against NRE fixed deposits can, however, be utilised for investments in India on non-repatriation basis, in certain specified areas and for acquisition of flats/houses subject to prescribed conditions.

  • Can Rupee Loans be taken against NRE / FCNR deposits by the account holder in India?

  • What is the maximum value of loans that can be taken against NRE / FCNR deposits?
    Rupee Loans to be allowed to depositor/third party without any ceiling subject to usual margin requirements.

  • Can a loan be given to third parties on the security of an NRE / FCNR deposit?

  • What are the purposes for which loans given against NRE / FCNR deposits?
    Loans can be taken against NRE / FCNR deposits for the following purposes:
    • Personal purpose or for carrying on business activities
    • Direct investment on non-repatriation basis by way of contribution to the capital of the Indian firms / companies
    • Acquisition of flat / house in India for residential purpose

  • Are there any prohibitions on the purpose for which these loans cannot be taken?
    The loans cannot be utilized for the purpose of re-lending or for carrying on agriculture or plantation activities or for investment in real estate business.                                                                                                           
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